Freedom 'bullet in the gun' for Virgin Blue's NZ plans

By CHRIS DANIELS

Virgin Blue would consider buying Air New Zealand's Freedom Air if it was for sale, the Australian airline's chief executive said yesterday.

Brett Godfrey said Air New Zealand would have to sell its no-frills transtasman airline if the proposed Qantas-Air New Zealand alliance was to overcome regulatory hurdles.

The status of Freedom Air was crucial to Virgin Blue's decision on entering the New Zealand market.

"Freedom for us is the bullet in the gun," he said.

"If Freedom Air is taken out of the equation, we feel very comfortable about going into the market," said Godfrey.

Virgin Blue commercial head David Huttner said Air New Zealand should not be allowed to continue using its low-cost subsidiary to shut out competition, as it had done with the now defunct Kiwi Air.

Huttner said Freedom Air would continue flying to centres such as Hamilton and Dunedin under Virgin Blue ownership. Airline staff would also be kept.

The divestment of Freedom Air was not the only thing that needed to be done before consent could be given to the Qantas/Air New Zealand alliance, he said.

Terminal facilities, both domestic and international were needed. Recent commitments given by Qantas and Air New Zealand to allow competition were not enough, as structural changes were needed.

Godfrey said the carrier would lodge its formal opposition to the "anti-competitive" deal with the Australian and New Zealand competition watchdogs on February 10.